The decrease in rates, which is scheduled to begin April 1, will cover 18 months until Jan. 1, 2014, when the “array of products and their pricing will change considerably” as a result of implementation federal health care reform, according to Koller.

In accepting the hearing officer’s recommendation, Koller rejected Blue Cross’s request for an overall average increase of 2.4 percent.

There are about 14,000 current Direct Pay customers in Rhode Island. Blue Cross is the only commercial health insurance who offers coverage to these individuals and families who are not eligible for Medicaid or Medicare and are not able to obtain health insurance through their workplace.

In his written decision, Koller also voiced concerns about the co-payments and deductibles being introduced in new products being offered by Blue Cross in this market.

“While lower up front rates that will be in effect for a year and half are welcome for Direct Pay subscribers, I am concerned with the level and type of cost sharing assumed in the products being introduced,” Koller said. “As Jan. 1, 2014, approaches, the order starts to align Rhode Island’s individual health insurance market with what is envisioned under the Affordable Act.”

When Blue Cross filed for the rate hike request, the health insurer also announced its plans to change its Direct Pay products, in order to make them more similar with the products it sells in other markets, which in every instance, involved greater cost sharing of medical services for Direct Pay customers, according to Koller’s written order. Because these proposed products “failed to offer subscribers adequate product choice with respect to cost sharing options,” Koller also ordered Blue Cross to develop an additional product with less cost sharing – consistent with the array of products envisioned to be available to individuals under the Affordable Care Act.

In response, Blue Cross said it was accepting Koller’s decision, although it emphasized that its filing was “actuarially justified.”

“Blue Cross acknowledges the Health Insurance Commissioner’s decision to amend our filed Direct Pay rates from an average 2.4 percent increase to an average of 1.1 percent decrease,” said Laura Calenda, assistant vice president of Public Relations at Blue Cross. “We share his concern for the vulnerability of the Direct Pay population and will accept his rate decision.”

Blue Cross, Calenda continued, “recognizes that the cost of health care is of real concern to Rhode Islanders and continues to look for ways to help moderate the cost of care without compromising quality.”

“We do, however, want to reiterate that our filing was actuarially justified,” Calenda said. “The rates we proposed are necessary to cover the cost of healthcare services for those who purchase insurance directly from us.”

Calenda also cautioned that the decrease was an average. “Depending upon their level of coverage and other factors, some members will actually see an increase, while others may see even greater decreases.”

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